A smattering of banks have been rolling out technology to automate interactions with small businesses, ranging from RDC to social media.

Western Union recently joined this trend by launching Small Business Payments, an online acceptance and accounts receivable service. Western Union is providing automated invoicing, recurring billing, customer management and reporting. "Small businesses are either sending paper invoices or are going directly to consumers for face-to-face collection," says David Shapiro, senior vice president of payments for Western Union. "That's inefficient and isn't the best use of the business operator's time."

The shortcomings of 1980s-style transaction execution, such as mailing paper bills to customers or driving to a bank to make physical deposits, have not yet been enough to get most small businesses to enter the digital age.

But by tying a tailored small business payment product to its ubiquitous brand, Western Union hopes it has the formula to win adoption. Western Union's proprietary consumer research also suggests small businesses would benefit from adopting online payments — the firm says 44 percent of consumers prefer to pay bills online. "By giving the small business the ability to deliver online invoices and receive payments online, we hopefully can save the billers a lot of time," Shapiro says.

The new portal lets small billers enroll at Western Union's website — the portal is aimed at businesses that accept less than 2,000 payments monthly. Businesses are vetted by the firm's credit review process and are then activated as billers. The businesses can email electronic bills to their customers and accept payments on their own websites or email. Payments can be executed by debit, credit or account transfer.

Western Union hosts the service for the small businesses, though the underlying tech is actually hosted by PaySimple, a small business online payments firm. Western Union will charge a monthly subscription fee for the service, though it did not disclose exact amounts. PaySimple charges between $11 and $34.95 per month for individual deployments of its digital payments product.

Shapiro envisions the Western Union portal serving businesses such as day care and sports leagues — local businesses that have small yet recurring payments.

Western Union has ample competition in the space. American Express offers AcceptPay, which allows businesses to accept credit cards, electronic checks and ACH payments online. Bills can also be sent by email, and like Western Union, there are CRM and recurring payment capabilities. Chase also offers a similar product suite.

"We think the presence of other firms that offer small business payments online is good for us; it's a huge market and there are so many businesses that are underserved," Shapiro says. "If there are other people out there offering this, that's making small businesses aware that this technology exists."

Western Union has also been active on other fronts in digital payments. It's developed a mobile foreign exchange product that allows businesses to conduct international transactions on smartphones. And recently it acquired eBillme, an alternative payment system developed by ModaSolutions of Rye Brook, N.Y.